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I assume you know what dropshipping means, but if not, it is really simple: connect a manufacturer with a customer (probably more like manufacturers with customers). No inventory, experience, knowledge, or startup cash required. It is easy, right? Well, yes and no.
Why Dropshipping Is So 'Trendy...'
...It is because most people want to get crazy rich within an hour or so without any skill, connection, or effort (that is why scams are working like never before). You just need a product, post some ads, and wait for the big money to roll in. But why do people keep thinking like this?
We live in the so-called "Information Era" or "Digital Era," and with that, internet is becoming (and has become for many) a pure necessity and a very powerful tool. You can connect to virtually any person on the globe, in any country, INSTANTLY. And yes, you can find numerous suppliers from any country, set up a shop with two clicks using very powerful marketing automation software and even artificial intelligence from the comfort of your sofa.
That is why it does not work for so many people. Everyone has access to such tools and an "infinite" amount of information, and I am quite sure everyone has 24 hours in a day. What matters is how one uses his skills, talents, connections, and resources.
Amazing Things I Learned:
1. Successful dropshipping requires capital.
Have money to make money. There are a great variety of solutions free on the internet. However, if you want to make serious money, you need to invest.
Reliable hosting and useful software are not free.
Maintaining quality relationships with vendors, customers, partners is not free.
Creating new ways to reach your customers efficiently is not free.
Again, there are methods to make it happen without costs involved, it just takes too much time or effort.
2. Without value, you will not succeed in the long run.
Buy low and sell high!—Says the famous investing adage. That is true for stocks, but there is one part missing for our purposes: value.
Selling mass-produced tie pins at a 1250 percent markup is a great idea on paper (from the seller's side) but what value will the customer get? You either build a brand and hype it (Dolce & Gabbana sunglasses for $500, anyone?) or provide something extra.
Extra information, reviews, testimonials, package offers, you name it.
3. You need to target specific audiences.
Otherwise you will face a real logistics nightmare. Your supplier is in China, you are in the US, and your three customers are in Brasil, Portugal, and Ghana.
This could be an issue when it comes to invoicing, shipping, duties, customer service, laws & regulations. Did you know, for example, in Singapore, chewing gum is forbidden?
Moreover, if you do not target specific audiences or "buyer personas" (25-34-year-old British single mums living around Manchester, UK is an example), you will burn a big sum of cash for ads (too).
4. It is a game of numbers, baby.
You heard it right. You may suck at maths, but still, I simply cannot emphasize enough the importance of numbers. I am not talking about just prices, taxes, or costs.
Charlie gathered 50,000 likes for his store. Good for him, right? Well, I would ask: how much does he earn (revenue generated, profit made) at the end of the day? It might be zero and it might be thousands of dollars.
Constantly review your activity and goals. Pursuing pure likes or retweets will get you nowhere. However, you do need to get more visitors, engagements, clicks and purchases day by day. How much? Only you can answer.
5. The Biggest Enemy of Your Success...
Oh, yes. What makes me say that?
Well, you can easily talk yourself out of a great deal or idea because of lack of faith in yourself.
You can also deceive yourself how hard you work by just being busy. Just ask yourself:
- How much time do I spend on tasks related to revenue generation?
- How many calls did I make to make a deal?
- How much time did I spend on social media instead of considering the two questions above?
It is extremely easy to go on with this list, because, frankly, we are all human.
What I Do to Reach My Goals...
When it comes to your next (or current) venture, please:
Set SMART (Specific Measurable Achievable Results-based Time-bound) goals and review them every single week.
Do not tell these goals to anyone.
Do plan your activities, tasks beforehand (I end every single day by planning the next one).
Mornings are beautiful. Wake an hour earlier and work without interruptions (no calls, emails, social media). Your creative inner-self will be gracious.
Always schedule correspondence to the other half of the day.
Time is scarce. Do not waste yours or others.